A lesson in FOMO: MicroStrategy stock price continues to soar
MicroStrategy shares have skyrocketed recently. Here's what's driving the rally and why investors need to be cautious after recent gains.
Why is MicroStrategy's share price surging?
MicroStrategy's stock surged 15% on Wednesday to $495.98, continuing its meteoric rise as the company capitalises on its strategic investments and market positioning. The company has seen its shares skyrocket nearly 700% this year, significantly outperforming its peers and broader market indices.
This rally follows a series of high-profile moves to enhance its financial standing and expand its asset base, boosting its market capitalisation to $109.3 billion and securing its place as the 88th largest US public company.
Executive Chairman Michael Saylor credits the company’s bold strategies and innovative focus for revitalising its operations, transforming it into a market leader with substantial growth momentum.
Understanding the risks of parabolic price moves
The recent parabolic move in MicroStrategy's stock price presents both opportunities and significant risks for traders and investors. Historical data suggests that such rapid price increases often lead to increased volatility, as evidenced by the Average True Range indicator jumping from 1500 to 3500.
Investors considering opening an online trading account should carefully evaluate their risk tolerance, given the stock's current momentum.
A potential pullback to the November 13 high would represent a 26% decline from current levels, highlighting the importance of proper position sizing.
Technical analysis of MicroStrategy's share price
The stock's technical indicators show extremely overbought conditions, though momentum remains strongly bullish. Trading volumes have surged alongside the price increase, suggesting strong institutional participation in the rally. Resistance levels have been consistently broken to the upside, with previous resistance points becoming new support areas. However, the distance from major moving averages suggests the potential for mean reversion in the medium term.
MSTR daily chart
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. Please see important Research Disclaimer.
Please also note that the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.
Seize a share opportunity today
Go long or short on thousands of international stocks.
- Increase your market exposure with leverage
- Get spreads from just 0.1% on major global shares
- Trade CFDs straight into order books with direct market access
Live prices on most popular markets
- Forex
- Shares
- Indices
See more forex live prices
See more shares live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
See more indices live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.
